When someone passes away, it’s a time to grieve.
However, there are a few orders of business you’ll need to take care of, and one main item is filing a death claim.
We’ll help walk you through the process below, including the claims process, documents you’ll need to have on hand, places you can check for lost policies, and even forms to file for Social Security death benefits.
Table of Contents
- The Process of Filing a Death Claim
- How Long Does it Take?
- When You Can Expect Payout
- How Death Benefits Are Paid Out
- Finding Out What Policies Someone Has
- Using the MIB Policy Locator Tool
- Social Security Death Benefits
The Process To Filing a Life Insurance Death Claim
The first step to filing a death claim for life insurance is obtaining the proper forms to do so from the deceased’s life insurance provider.
Getting death claim forms is actually a simple process. The first thing you will want to do is get in touch with the insurance company, specifically the agent the deceased worked with or any agent who works for the company directly.
Once contacted, the agents can expedite the process and give you the personal service you need in order to make the process as simple as possible. Let them know of the death so they can begin the process of paying out the death benefit.
Being prepared will expedite this process even further and make it much smoother for you.
In order to start the claims process, the life insurance company will ask for these 3 legal documents to ensure against fraud:
- a death certificate
- life insurance policy document
- insurance company claim form
The insurance company will need a certified copy of the policyholder death certificate. This will prove the claim is legitimate and help to prevent any fraud.
You want to make sure you send a copy of this document, and not the original, just to be safe and have the original on hand if needed.
Your funeral home can make copies for you, or you can also request them directly from the State.
The policy document contains information like the length of term, the death benefit amount, monthly premiums, and additional details about the policyholder.
The insurance company needs this document to cross-reference with their own records, again to make sure you are making the claim on the right policy.
In some cases, you might not be able to find the policy document or you didn’t know there was one in the first place. Do not worry.
If you cannot find the policy document, contact the insurance company to let them know the deceased had a policy with them. While this may bring more complications in the process of filing a death claim, you will still be able to do so.
If you can’t find the policy document you might be able to find something like proof of premium payments through bank statements to help refine the search.
Most policyholders will pay their premiums on an annual basis rather than a monthly basis so it is best to start looking at checks at the beginning of the year.
You can also contact the State insurance department because they typically have more information. It is possible the deceased had their insurance through a private organization like a fraternal organization or their workplace.
If you think this might be the case, contact your State insurance department, who will be able to point you in the right direction.
The third thing you will need is the claim form.
This is also called a request for benefits and you need to use it to, as the name suggests, request your benefits.
These policies forms are very straightforward.
All you have to do is fill out the information about the policyholder which includes things like the cause of death and the policy number.
Then, you must fill out a bit of information about yourself as the beneficiary and then send the claim form with the policy document and death certificate back to the insurance provider.
They take everything from there.
How Long Do You Have To File A Death Claim?
There is no limitation on filing a life insurance death claim.
In effect, the insurance company has to pay, regardless of how long ago the deceased person has passed, so long as you can prove the claim with the above information.
In fact, even if the life insurance company goes out of business, all proceeds for unpaid benefits go into receivership, and remain available.
The only exception is if you are denied a claim, in which you have a statute of limitations of two years to make your case.
When to Expect the Life Insurance Death Benefit Payout
Once the insurance company has all of these documents they start to process the claim.
The first thing the life insurance company will do is perform a few preliminary checks to make sure you are the beneficiary assigned to this policy so they don’t pay the wrong person.
They also want to make sure the policy is still active which means they have to investigate whether premiums have stopped or whether the term limit expired.
Then there is the contestability period. If your policy is less than 2 years old and in the contestability period, the life insurance company will dig into medical records to see if it’s contestable.
Usually, this is because the first two years only pay out a certain amount based on types of death so they need to investigate whether there was something like a pre-existing condition which might render the death benefits invalid or if the insured’s death qualified as an accident.
This process can take a few weeks up to a few months.
If anything was found to be false on the life insurance application or the death was considered to be contestable, then the life insurance company will not pay the death benefit of the policy.
Two Year Maximum
If this process of investigation for contestability lasts longer than two years, the death benefit of the policy is automatically paid out to the beneficiary. When this occurs, you can expect the check within 2 weeks of the 2-year mark.
Other things life insurance companies might have to investigate include suicides or homicides.
Some policies have a suicide clause which states if the death was a suicide, the death benefit is not paid out. This also has the same 2-year window.
If the death was a homicide, spouses are named as beneficiaries more often than not but of course, spouses are typically the first suspect whenever there was a murder case.
As such, the insurance company has to wait until the beneficiaries have been legally cleared of any wrongdoing and are no longer suspects before they can pay out the death benefit.
Assuming there was nothing to contest, the insurer will pay out the death benefit anywhere between a few days up to a few months.
Despite what you may think, insurance companies want to pay out as quickly as possible because if they don’t, they are charged interest on the unpaid death benefits.
However, they also want to make sure they have conducted their due diligence to make sure there is a reasonable expectation for them to payout.
How Life Insurance Death Benefits are Paid Out
After everything has been cleared there are a few ways you can receive the death benefit.
The two most popular include:
- or lump sum.
The full death benefit will be given to you tax-free to use as you need.
Not everyone is comfortable having such a large amount of money to manage at once because it can be overwhelming
For this reason, installment payments can be set up so you are paid incrementally throughout your life. You can choose the length of time between 5 and 40 years.
Many people prefer this type of payment because it spreads out the money over a longer amount of time and provides a steady income replacement.
How to Find Out About Other Life Insurance Policies
Often times, people may have multiple life insurance policies from multiple insurers.
Due to the fact life insurance isn’t something often talked about, it may be difficult to know if this is the case with your deceased relative.
The last thing you want is for their life insurance coverage to not fulfill its purpose in the light of their death.
Sometimes going through documents is just too difficult, and leads nowhere; so what can you do?
Here are some common options:
State Treasurer & National Unclaimed Property Searches
To verify if your deceased relative did have additional life insurance coverage, start searching with the State Treasurer and National unclaimed property searches.
These resources are meant to help people in your exact situation.
Lost Policy Finders & State Insurance Departments
You can also use lost policy finders, which are offered by many life insurance companies.
However, this can be a long and tedious process, and with thousands of insurers, it can be pretty unfruitful.
There is also State insurance department policy locators, which can be very helpful when conducting this search.
We suggest you start here and only use the lost policy finders as a last resort unless you know for certain your loved one had a policy with a company who is still unpaid.
Searching Through Important Legal Documents
If you are looking for a more personal approach, you can start by checking through personal papers and address books for any listings of insurance agents, estate planners, financial advisors, or lawyers.
If there are any safety deposit boxes check them for insurance papers or other related policy papers.
Review income tax returns for any distributions of life insurance policies.
Check the mail for at least one year following their passing for any notices of policy status changes, premium notices, or other policy statements mailed.
Checking With Former & Current Employers
Checking with any former or current employers to see if there are life insurance policies purchased through work is also a good place to start.
Check bank accounts and canceled checks for any premium payments or policy loan interest payments made to an insurance company.
Checking With Other Insurers
Check with any fraternal organizations or professional membership groups to which they belong to see if they made life insurance available to their members.
Check with their homeowners’ insurance agent and their car insurance agent to see if they were sold a package.
Using Third Party Services to Locate Unpaid Life Insurance Policies
Beyond checking office files and working with these organizations there are private services (for a fee) which can help you.
If you have given all of these methods a try and are still coming up short, or you would like to skip it all and make the process easier on yourself and your family, contact the MIB and use their policy locator service.
How Does the MIB Policy Locator Work?
The MIB policy locator can potentially identify application activity for underwritten life insurance policies.
It can provide search results for life insurance applications but it doesn’t actually indicate whether the life insurance was issued or if it was in-force at the time the individual passed.
It also cannot determine whether there are any benefits which are payable.
If application activity is identified by this company a report will provide the name of the company, the date the application was submitted, and any contact information you need to follow up with the activity and determine whether a policy was issued and if it was, whether the policy remains in force.
The report will notify you as to whether application activity was identified or not and it will be mailed within 21 business days.
The policy locator service report can be ordered by an Executor or Administrator for a descendants estate, a surviving spouse, or the closest living relative of the descendant.
From here, you will still have to get in contact with the insurance company and go through the process of authenticating yourself and the deceased in order to begin the claims payout process.
Does Social Security Help With Death Benefits?
If you have social security, you can receive a social security death benefit of $255.
You will need to fill out form SSA – 8 in order to apply for the lump sum death benefit. You can also visit a local Social Security office to expedite this process.
In many cases, a funeral home will report the death to the government but you can also report the death and apply for the benefit yourself if you are the beneficiary by, again, visiting your nearest Social Security office or calling the national hotline.